Floyd industries stock has a beta of 125 the company just, Ask an Expert

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Floyd Industries stock has a beta of 1.25. The company just paid a dividend of $.40, and the dividends are expected to grow at 5 percent per year. The expected return on the market is 12 percent, and Treasury bills are yielding 5.0 percent. The most recent stock price for Floyd is $67.

a. Calculate the cost of equity using the DDM method. (Round your answer to 2 decimal places.)

b. Calculate the cost of equity using the SML method.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91595980

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